Local business owners say Yelp offers to hide negative customer reviews of their businesses on its web site ... for a price.

This article won first place for in-depth, investigative reporting at both the 2010 East Bay Press Club's Excellence in Print Journalism Contest and the 2010 Society of Professional Journalists awards.

The phone calls came almost daily. It started to get creepy.

"Hi, this is Mike from Yelp," the voice would say. "You've had three
hundred visitors to your site this month. You've had a really good
response. But you have a few bad ones at the top. I could do something
about those."

This wasn't your average sales pitch. At least, not the kind that
John, an East Bay restaurateur, was used to. He was familiar with
Yelp.com, the popular San
Francisco-based web site in which any person can write a review about
nearly any business. John's restaurant has more than one hundred
reviews, and averages a healthy 3.5-star rating. But when John asked
Mike what he could do about his bad reviews, he recalls the sales rep
responding: "We can move them. Well, for $299 a month." John couldn't
believe what the guy was offering. It seemed wrong.

In fact, something seemed shady about the state of his restaurant's
negative reviews. "When you do get a call from Yelp, and you go to the
site, it looks like they have been moved," John said. "You don't know
if they happen to be at the top legitimately or if the rep moved them
to the top. You don't even know if this is someone who legitimately
doesn't like your restaurant. ... Almost all the time when they call
you, the bad ones will be at the top."

Usually, John said, he would politely decline to advertise. "Well,
thanks," he'd say. "I'll talk to my partner about it." Or, "It's not
really in my budget right now." But inevitably, in another week or so,
he'd get another phone call. Occasionally, the voice on the other end
of the phone would change, but the calls continued. These days, John
chooses to not answer his phone when it's from a number with a 415 area
code.

John may sound paranoid, but he's got company. During interviews
with dozens of business owners over a span of several months, six
people told this newspaper that Yelp sales representatives promised to
move or remove negative reviews if their business would advertise. In
another six instances, positive reviews disappeared — or negative
ones appeared — after owners declined to advertise.

Because they were often asked to advertise soon after receiving
negative reviews, many of these business owners believe Yelp employees
use such reviews as sales leads. Several, including John, even suspect
Yelp employees of writing them. Indeed, Yelp does pay some employees to
write reviews of businesses that are solicited for advertising. And in
at least one documented instance, a business owner who refused to
advertise subsequently received a negative review from a Yelp
employee.

Many business owners, like John, feel so threatened by Yelp's power
to harm their business that they declined to be interviewed unless
their identities were concealed. (John is not the restaurant owner's
real name.) Several business owners likened Yelp to the Mafia, and one
said she feared its retaliation. "Every time I had a sales person call
me and I said, 'Sorry, it doesn't make sense for me to do this,' ...
then all of a sudden reviews start disappearing." To these mom-and-pop
business owners, Yelp's sales tactics are coercive, unethical, and,
possibly, illegal.

"That's the biggest scam in the Bay Area," John said. "It totally
felt like a blackmail deal. I think they're doing anything to make a
sale."

Yelp officials deny that they move negative reviews, although such
allegations have surfaced many times before. The issue is even
addressed on the web site's Frequently Asked Questions page. Chief
Operating Officer Geoff Donaker said advertisers and sales
representatives don't have the ability to move or remove negative
reviews. "We wouldn't be in business very long if we started duping
customers," he said.

But Donaker's denials are challenged by nine local business owners
and also by a former contract employee who worked with Yelp in its
early days. That person, who is still close to some Yelp employees and
only agreed to be interviewed if granted anonymity, said several sales
reps have told him they promised to move reviews to get businesses to
advertise. "It's not illegal or unethical," he said they told him.
"We're just helping the little guy. It doesn't hurt them, it benefits
them."

Such tactics may be legal, but they clearly raise ethical concerns.
Yelp touts its web site as consisting of "real people" writing "real
reviews." The allegations of business owners who have tangled with the
company suggest otherwise.

If Yelp indeed suppresses honest reviews in exchange for its
advertisers' money, it is cheating users who expect genuine consumer
feedback. Conversely, if Yelp demands payment to remove even dishonest
reviews, then advertisers are being cheated.